Even as futures are feeling buoyant as a result of the JPY drop following the collapse of the Japanese ruling coalition (which in itself will likely spell serious JGB troubles in the days ahead), Middle-east geopolitical issues have once resurfaced... or technically submerged as the case may be. The Sunday Times reports that "three German-built Israeli submarines equipped with nuclear cruise
missiles are to be deployed in the Gulf near the Iranian coastline." Presumably, this a defensive move: "The first has been sent in response to Israeli fears that ballistic
missiles developed by Iran, Syria and Hezbollah, a political and
military organisation in Lebanon, could hit sites in Israel, including
air bases and missile launchers. The submarines of Flotilla 7 — Dolphin, Tekuma and Leviathan — have
visited the Gulf before. But the decision has now been taken to ensure
a permanent presence of at least one of the vessels." We are not sure Iran will take the news with the required dose of stoic acceptance. But at least we now have confirmation that Israeli subs are not being used by the Obama administration as a means of delivering nuclear armaments to the continental shelf (unless this too, is another Criss Angelesque Emmanuel Rahm masterpiece).

More from the Times:

The flotilla’s commander, identified only as “Colonel O”, told an Israeli newspaper: “We are an underwater assault force. We’re operating deep and far, very far, from our borders.”

Each of the submarines has a crew of 35 to 50, commanded by a colonel capable of launching a nuclear cruise missile.

The vessels can remain at sea for about 50 days and stay submerged up to 1,150ft below the surface for at least a week. Some of the cruise missiles are equipped with the most advanced nuclear warheads in the Israeli arsenal.

The deployment is designed to act as a deterrent, gather intelligence and potentially to land Mossad agents. “We’re a solid base for collecting sensitive information, as we can stay for a long time in one place,” said a flotilla officer.

The submarines could be used if Iran continues its programme to produce a nuclear bomb. “The 1,500km range of the submarines’ cruise missiles can reach any target in Iran,” said a navy officer.

It now seems that the Middle East is dead set on repeating the recent submarine-centric Korean festivites pretty much verbatim. Iran's reaction is not all that surprising:

Apparently responding to the Israeli activity, an Iranian admiral said:
“Anyone who wishes to do an evil act in the Persian Gulf will receive a
forceful response from us.”

The most troubling thing is that events in the Persian Gulf are moving much faster and politicians risk to lose all control imminently: precisely the stuff market melt ups are not made of.

Israel’s urgent need to deter the Iran-Syria-Hezbollah alliance was demonstrated last month. Ehud Barak, the defence minister, was said to have shown President Barack Obama classified satellite images of a convoy of ballistic missiles leaving Syria on the way to Hezbollah in Lebanon.

Binyamin Netanyahu, the prime minister, will emphasise the danger to Obama in Washington this week.

Tel Aviv, Israel’s business and defence centre, remains the most threatened city in the world, said one expert. “There are more missiles per square foot targeting Tel Aviv than any other city,” he said.

If that is indeed the case, one wonders what the logic of an act such as this one reported by Wire Update is: "Reports say Israeli ships attack Gaza aid flotilla. At least several people were killed and scores of others were left injured after Israeli ships clashed with six ships carrying pro-Palestinian activists and aid for Gaza, according to news reports on early Monday." A livestream of the attack on Turkish aid ships in international water via CNN Turkey can be seen here.

Is Israel now actively seeking not only to wage war, but a two-fronted one at that? (did not work out too well last time this was attempted). We don't know, although with bizarro futures, where the ES reacts inversely to what fundamentals suggest, look for another 100 points S&P move higher even with US markets close, as the world inches one step closer to nuclear war.

BREAKING: Israel Attack Gaza Aid Ships: 10 dead, 30 wounded
Ten people were reported killed and about 30 wounded as Israeli forces stormed a Turkish ship in the flotilla carrying aid to the Gaza Strip, according to Turkish media. The Israeli military declined to comment on the report and organisers of the aid convoy said they were no longer in contact with the boats.

(Reuters) - Israeli commandos stormed a convoy of Gaza-bound aid ships on Monday and more than 10 of the mostly international activists aboard were killed, provoking a diplomatic crisis and Palestinian charges of a "massacre."

Every ship to Gaza is an "Aid Ship". The aid typically consists of several tons of ordnance/munitions. Long before the "Aid Ship" arrives, Israel knows its last port of call, its manifest (reported/actual), and who is financing it.

If Israel was a terrorist state, they'd have long ago reduced Syria and Iran to rubble using nuclear weapons. Your statement is foolish.

They are attempting, within their means, to create a MAD defensive structure that ensures, in the event of a nuclear/biological attack against their population, that something survives to rain ruination on the heads of the offending party(ies). It probably means they have decided against a pre-emptive strike, which some game-theorists say would spark WWIII.

I hope they have made the right decision. Arabs supply us with oil. That is all. Nothing else, not so much as a nifty new-fangled zipper comes out of the Middle East. I spent 3 months in Saudi Arabia designing optical cable constructions for a push to modernize their infrastructure. The first country I landed in on the way home was Switzerland. I made like the Pope and kissed the ground on the tarmac. Even the flies in Saudi Arabia are bloated, lazy, and offended when you wave them away.

I worked in a Syrian-owned cable facility in Riyadh---Riyadh Telephone Cables (RTC). There was a hole out back to relieve yourself into. The only people doing work were Indians and Pakistanis. The whole country prays 8 times a day and has no time for self-improvement of any sort. They are too busy hating the West and Israel. I never saw a woman's face for all the time I was there. Pure Hell on Earth. The Kingdom of Saudi Arabia.

What does Saudi Arabia have to do with Iran again? MAD would be in place if Iran obtained nukes, Israel already has missiles that can reach Iran, the subs are there to provoke them... The rest of your comment is even more ignorant.

Israel is trying to starve the people in Gaza to death because they elected Hamas. Democracy is not always desirable...

Oh, blow me, asshole. Go to Saudi Arabia and see for yourself what kind of hell they've made for themselves. Go to any ME country and see for yourself. Then consider what it's like in Persia. A thousand times worse.

The aid typically consists of several tons of ordnance/munitions. Long before the "Aid Ship" arrives, Israel knows its last port of call, its manifest (reported/actual), and who is financing it.

Absolute Bovine Excrement. Long before the ships leave Cypress, Greece, the ships cargoes are inspected and Israel can call upon these manifests quite easily, even if they didn't want to rely on the copies kept on board the ship during it's sail. The goal, by Israel, is to further starve Palestinians and impose draconian sanctions.

This is not the first time Israel has attacked aid ships on their way to Gaza. In December, 2008, Israel did something similar to the boat that Cynthia McKinney was aboard where the Israeli military attacked and rammed that boat as it was on it's way to deliver aid to Gaza.

And just so you know, a lot of what is on those aid ships consists of food, medical supplies and building materials (to rebuild what Israel constantly destroys). For some odd reason, fueled by ignorance, you "believe" that the ships are loaded with weapons. WMDs? Ha, ha, ha. Please. What's next? The flotilla has ties to AL-CIA-Duh?

Also, let me point out that Israel has no right to board or attack a foreign flagged ship in international waters. Period. Any ship at sea in international waters, when confronted with a potential act of piracy or an act of war, has a right to defend itself.

If Israel was a terrorist state, they'd have long ago reduced Syria and Iran to rubble using nuclear weapons.

That don't need to use nuclear weapons to do that. Israel has, many times, attacked Syria (last time was Sept., 2007) and is constantly threatening Iran. That is, by definition, "terrorism".

Arabs supply us with oil. That is all. Nothing else, not so much as a nifty new-fangled zipper comes out of the Middle East. I spent 3 months in Saudi Arabia designing optical cable constructions for a push to modernize their infrastructure. The first country I landed in on the way home was Switzerland. I made like the Pope and kissed the ground on the tarmac. Even the flies in Saudi Arabia are bloated, lazy, and offended when you wave them away.

Thank you for sharing with us, your hatred of Arabs. And as far as oil is concerned, I can see that you're quite happy in consuming it. Next time, don't use a plane or a motorized vehicle as transportation and see how well you manage. Should those who supply your oil and (according to you) nothing else, should no longer supply it, I'd think you'd be in a zero-sum game. Think about that for a while.

I worked in a Syrian-owned cable facility in Riyadh---Riyadh Telephone Cables (RTC). There was a hole out back to relieve yourself into. The only people doing work were Indians and Pakistanis. The whole country prays 8 times a day and has no time for self-improvement of any sort. They are too busy hating the West and Israel.

Then why did you accept the job? Gun to your head? According to what you wrote, East Indians and Pakistanis were the only ones doing the work anyway.

I find your whole rant amazingly contradictory, yet you gladly accepted employment, and worked with, those whom you despise so greatly. What a farce. Then you share it with us as though we should be as equally as disgusted. I'm laughing AT you.

If you want freedom to speak your ignorance freely, then go create your own site where you can drag your knuckles freely. For it is you that, seemingly, has no time for self-improvement of any sort.

Totally agree with your sentiments about Arabs and the ME for that matter. But that does not change the fact that Israelis entered their land (Palestine) with rifles and a book that said, "We lived here 2000 years ago." So, "Fuck off and get out of your houses and olive groves before we kill you and start !bulldozing !" .......Actions that they then proceeded to carry out.

The Israeli Jews had no Title Deeds to anything at all and are now claiming legitimacy for actions that lack legitimacy at the core. For that reason alone I can't see how you can support them.

I'm guessing because the commandos doing the shooting came from Israeli Naval vessels and helicopters. Add that to the fact that Israel has been in the media threatening to use force to stop the aid ships and the question becomes who else would have been firing at them before Israel took control of the ships?

true enough but if so they are fools for they would be psychotically delusional to have weapons on board knowing that there is a near 100% chance the israelis would stop them and seize the cargo. of course, like many of a truly failed drug bust, there may be "evidence" found that in fact came from the "police" not the "perps".

Maybe sage fools the dogs... Maybe if you're bringing in "sage" they want an excuse to further examine your bags/items and whatever else you are bringing in to the country because the odiferousness of the herb helps hide the scent of other items.

It's why I always pack my blow in a container of peanut butter when I go travelling. (I wonder if that urban myth actually works - I'd love to see Mythbusters do that one at LAX).

Maybe sage fools the dogs... Maybe if you're bringing in "sage" they want an excuse to further examine your bags/items and whatever else you are bringing in to the country because the odiferousness of the herb helps hide the scent of other items.

It's why I always pack my blow in a container of peanut butter when I go travelling. (I wonder if that urban myth actually works - I'd love to see Mythbusters do that one at LAX).

Can't read it without logging in but I'm sure it doesn't have anything new. This has been building for the past week so it shouldn't surprise anyone (maybe the MSM sheeple). I figured Israel would board the ships (possibly damaging them first like in the past) and arrest the passengers, but I didn't think they would kill anyone (that doesn't mean I'm surprised).

Thanks. That is some funny shit! It's a very good sign that the propaganda is now only aimed at the lowest common denominator (grown-ups with the minds of children). I guess it's not worth their effort since they were unable to kill one of the satellite feeds that captured the event. Governments hate the internet.

I can't wait to see how the MSM deals with this one. The only way it could get worse for the statists in Israel is if it turns out that any of the more well known passengers (e.g.; Hedy Epstein, Edward Peck, Joe Meadors, Ann Wright, etc.) are among the dead/wounded.

Americans think Al-jazeera is somekind of terrorist news media. They have no clue that Al-jazeera is one of the LAST real news gathering organizations left in the world with far more objective coverage of events than our own tabloid American pathetic news media. Walter Cronkite would have worked for them in a heart beat. You can pick them up if you live near a Canadian broadcaster, seems at least the Canadians are not afraid of the truth as the American media and government seems to have fears of. Also the internet, but I don't know the www id.

Now...is there some relationship we are not seeing with regard to the Gulf oil crimes?